Posts Tagged ‘ICFR’
UPS Fined $45M for Bad Goodwill Moves
The Securities and Exchange Commission has fined UPS $45 million for covering up a nearly $500 million goodwill impairment the company should have disclosed in a poorly performing business unit, until the company sprang the bad news on investors more than a year later — an astonishing lapse of internal control for such a large,…
Read MoreBetting/Bitcoin Biz Settles FCPA Charges
Federal prosecutors have sanctioned a one-time Chinese online lottery business turned bitcoin mining operation for violations of the Foreign Corrupt Practices Act, where senior executives bribed Japanese lawmakers in the late 2010s to win permissions to open a casino there — and good lord, writing that sentence feels like hitting some sort of corruption risk…
Read MoreA Fresh Example of Poor Control Environment
The Securities and Exchange Commission has charged a Massachusetts company with allowing a poor control environment and weak segregation of duties, which in turn allowed one of the company’s corporate finance directors to inflate his division’s financial performance for years. The company in question is Circor International, a maker of industrial valve systems for the…
Read MoreInternal Accounting Controls and Cyber Risk
Today I want to return to that recent enforcement action against RR Donnelley, where the Securities and Exchange Commission cited faulty internal accounting controls at Donnelley as grounds to impose a $2.1 million sanction over the company’s poor handling of a cybersecurity incident. What are internal control professionals supposed to make of an enforcement action…
Read MorePCAOB Alert on Company-Produced Evidence
The PCAOB has published fresh advice for audit firms about how to evaluate data and reports provided by their client companies. Internal audit teams might want to take note, since such PCAOB “advice” has a habit of soon becoming new demands placed upon you by your auditor. The report, blandly titled “Inspection Observations Related to…
Read MoreYes, Automating ICFR Helps, But…
Internal audit and GRC professionals talk all the time about the importance of automating internal controls. Now we have some fresh academic research demonstrating what sort of benefit a company can gain from following that path. The research comes from Musaib Ashraf, an accounting professor at Michigan State University who published a nifty paper several…
Read MorePCAOB Talks 2024 Audit Issues
The Public Company Accounting Oversight Board plans to inspect more corporate audits in 2024, casting an especially watchful eye at audits of financial and IT companies, as well as businesses that engaged in mergers and acquisitions in 2023. So says an alert the PCAOB published earlier this week, previewing the agency’s priorities for 2024 audit…
Read MoreAn Update on SOX Compliance Issues
Earlier this week I attended a webinar hosted by KPMG about the current state of Sarbanes-Oxley compliance, since 2023 is coming toward a close and audit professionals need to start thinking about the SOX compliance season that will start up early next year. We have lots to go through here. For starters, SOX compliance does…
Read MoreSEC Warns on Risk Assessments
The top accountant at the Securities and Exchange Commission is warning auditors and corporations alike to do better at risk assessments, and in particular to pay more attention to small control failures that might be suggestive of larger issues in a company’s control environment. Chief accountant Paul Munter released his statement Friday afternoon, a maneuver…
Read MorePCAOB Blasts Audit Firm Deficiencies
The Public Company Accounting Oversight Board is taking audit firms to task this week, issuing a special report about the most recent round of PCAOB inspections that found an “unsettling trend” of ever-more deficient audits — results that the PCAOB chair blasted as “absolutely unacceptable.” “These findings are absolutely unacceptable, and audit firms must make…
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